The stock of Himadri Speciality Chemical has been consolidating within ₹40 and ₹65 since April 2020 following a long-term downtrend. The downward movement began in January 2018 from about ₹195. Before entering the consolidation, it made a low of ₹27.20 in March 2020.
Last week, the stock decisively broke out of the resistance at ₹65, turning the short-term outlook positive. The breakout occurred with a significant volume and indicators like RSI and MACD on the daily chart are showing positive signs.
The stock is likely to touch to ₹100 in the short run. However, the 38.2 per cent Fibonacci retracement level of the prior downtrend lies at ₹92, acting as a hurdle for the bulls. Whatsoever, a rally to ₹92 is most likely to happen. On the downside, ₹78 can provide a good support.
Given the above factors, traders can consider buying the stock at current level with a stop-loss at ₹77.50. Since the price level of ₹92 is a minor resistance, one can liquidate the longs when the stock touches it.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)